LDC, the mid-market private equity firm, invested £437million of equity last year in 23 new deals, a record total for the business, driven by continuing demand for private equity from the UK’s medium-sized businesses.
The firm is committed to investing £1.2billion in ambitious high-growth firms over the next three years (2019-2021), which includes investing £150million in businesses across the Midlands over the next 12 months.
Key deals by the Midlands team during 2018 included backing the £22.5million management buyout of Precision Micro, Europe’s leading photo-chemical etching company, and a multi-million-pound investment in Neilson. In addition, the team backed the management buyout of OCS Asset Solutions with a £13million investment to support its expansion, and completed a minority investment in SMH Fleet Solutions to support a buy and build strategy.
In July, the Midlands team exited its partnership with pallet distribution services provider The Pallet Network in a £52.8million trade sale to leading UK supply chain, transport and logistics group Eddie Stobart Logistics plc. This followed a 10-year partnership, during which it trebled its revenues and acquired courier service Ezehaul.
On LDC’s exits across the UK, the firm said it had worked closely with management teams throughout 2018 to take advantage of favourable selling conditions with 26 divestments. Total proceeds generated reached £1billion with an average money multiple of 2.7 times.
Looking ahead, LDC said it expects a challenging period across the market as uncertainty continues, but LDC confirmed its appetite to invest remained as strong as ever.
Richard Whitwell, Head of LDC in the Midlands, said: “The Midlands is one of the UK’s biggest economic hubs and is renowned for being home to some of the country’s strongest, most resilient businesses. The region therefore continues to be a key focus for LDC and we’re ready to support local management teams with funding and expertise to help build long-lasting value.
“LDC is committed to backing business ambition and over the next three years, we’ll be investing £1.2billion in ambitious firms across the UK to ensure that they have the support and investment they need to achieve their growth plans.”
Alongside its investment and exit performance, LDC also provided a summary of its portfolio impact from 2018, confirming that companies it sold during 2018 had increased their enterprise value by an average of 138% during its partnership, grown sales by 79% and profit by 45%. Together, these 26 companies added a total of 2,784 roles to their teams, and with LDC’s support expanded into more than 25 countries and developed 50 new products or services.
Martin Draper, CEO of LDC, added: “Last year was another milestone year for LDC, which saw us deploy our capital and expertise from every one of our regional teams. The outcomes achieved not only demonstrate the success of our unique, value-driving model, but also the importance of having a presence in the region to create enduring partnerships that enable companies across the Midlands to thrive.”